NY Commercial Litigation Insider

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The Commercial Division justice assigned to hear residential mortgage-backed securities cases issued companion rulings March 29 that limited the use of the CPLR's "savings provision" by the plaintiffs' bar to revive cases dismissed on statute of limitations grounds.

The First Department held that a plaintiff's failure to make a pre-suit demand of JPMorgan's board of directors doomed a derivative action brought by a pension fund that lost money on JPMorgan stock, and in a separate ruling, established an accrual date for common-law fraud and aiding and abetting claims brought against issuers of mortgage-backed securities.

A First Department panel found the plaintiff, which lost its $20 million investment, "identifies no alternative transactions, let alone one that would have achieved more value" than the $16 billion sale of a real estate portfolio the Lehman-controlled entity completed in 2012.

Litigator’s Corner

In his International Arbitration column, John Fellas writes: Given the differences in the treatment by New York courts of foreign arbitral awards and foreign judgments when it comes to the applicability of jurisdictional defenses, a question arises: Is it possible to avoid the jurisdictional obstacles to the enforcement of foreign arbitral awards by seeking to enforce not the arbitration award itself, but rather the foreign judgment confirming that award? A recent case affirms that this is indeed possible.

Lanier Saperstein, Daniel W. Beebe and Carol Lee review a recent Southern District decision that represents a significant departure from recent Second Circuit precedent as well as a New York Court of Appeals decision where the court held that a foreign bank's "mere maintenance" of a correspondent account in New York is insufficient to support the exercise of personal jurisdiction over that bank.

In their Second Circuit Review, Martin Flumenbaum and Brad S. Karp discuss 'Atlantica Holdings v. Sovereign Wealth Fund Samruk-Kazyna,' in which the court decided, in an issue of first impression, that a sovereign wealth fund owned by a foreign government is not immune under the Foreign Sovereign Immunities Act from a lawsuit alleging that it misrepresented an affiliate's debt notes to investors.

Institutional investors are suing Volkswagen for 3.25 billion euros ($3.57 billion) in damages over the company's handling of its emissions scandal, which has so far seen the share price fall by about a third.